Yesterday, the Dow Jones Industrial Average traded below the lowest point of the previous session and above the highest point as well. This outside reversal is seen as a very positive technical signal.

Dow Jones Industrial Average

Open

High

Low

Close

March 8

25,347

25,466

25,252

25,450

March 11

25,208

25,661

25,208

25,680

Dow Jones Industrial Average

America’s Goldilocks Era: February CPI

Headline +0.2% consensus +0.2%

Core +0.1% consensus +0.2%

Year ago +1.5% prior month +1.6%

There are some surprising declines in the report.

New Vehicles -0.2%

Used Vehicles -0.7%

Medical commodities -1.0%

Hospital services -0.7%

These four items make up 7.7% of all household expenses.

The biggest gainers were airlines +0.5 and tobacco +0.5, which combined are 1.3% of household expenses.

CPI Change

Portfolio Approach

We went long a new Consumer Discretionary position and made some weighting and bolding changes. Now is a great time to get started on the Hotline.

Boeing (BA) is still in the spotlight, as more global airlines bail on the 737 Max until there are additional answers. All the major indices climbed on benign inflation news pointing to the Goldilocks scenario for the economy and investors.